The C-terminal hypervariable domain of K-Ras4B targets the protein to the plasma membrane by a combination of positive charge and a hydrophobic signal (farnesyl group). We analysed the contribution of several structural features of the domain: net charge, charge distribution, amino acid sequence and lipid specificity to membrane targetting and function by using artificial 'hypervariable' domains fused to either EGFP or V12KRas4B. We found that charge and a lipid residue are sufficient for plasma membrane localization and function of the constitutively active V12K-Ras4B. However, the amount of net charge, charge distribution and the length of the anchoring domain are important. Increasing the net charge and concentrating it close to the C-terminus increases not only the percentage of membrane bound protein, but also shifts the distribution from internal membranes, including the nuclear envelope, to the plasma membrane. While plasma membrane binding is necessary for V12K-Ras4B activity (MAPK activation and focus formation), we found that there are additional restrictions. In particular, mutants with very highly charged domains that bind almost exclusively to the plasma membrane show less transforming potential than expected. In addition, a construct with a short 'hypervariable' domain (7 amino acids) also has decreased transformation activity. These results suggest that specific interactions between K-Ras4B and the plasma membrane are required.